Start-up plays dangerous game with music biz

There's legit online community and then there's unlicensed MP3 distribution. A new start-up wants to do both
Written by ZDNet Staff, Contributor

Ever since the debut of the Rio MP3 music player last October, the music industry has worried that mixing the Internet and music would lead to widespread piracy. To date, though, finding pirated music on the Internet has been difficult.

Not anymore.

Napster, a small start-up, gives music lovers a chance to chat online and browse each other's collections of MP3 music, the de-facto standard for high-quality audio on the Internet.

The feature that has caused traffic to the site to overwhelm the company's servers, however, is Napster's ability to let chatters trade their MP3 files with each other. "It has been hugely successful," said Shawn Fanning, chief executive of the company. "We have doubled in size for the past five days. Our goal eventually for our users is to be unaffected by the growth."

While users of the service passing back and forth copyrighted music may be breaking the law, Napster could sidestep any prosecution. The recently passed Digital Millennium Copyright Act of 1998 allows search engine companies to link to MP3 files. However, if notified that the link points to copyrighted music, the search company must remove the link immediately.

"Anyone that contributes to the infringement of a copyright can be prosecuted," said Bob Kohn, chairman and founder of Internet music label Emusic.com and music licensing expert. "Someone that has a search engine that links to a (copyrighted) MP3 file can be accused of contributory copyright infringement."

The upshot for search engines like Scour.net, Lycos and Napster? "If the search engine removes the file immediately upon notice, then they are safe," he said.

A legal tightrope Fanning stressed that he is intent on playing within the law. In fact, the company chief has hired the firm of Wilson, Sonsini, Goodrich & Rosati to advise the company and deflect the inevitable legal crossfire. That same firm successfully staved off a lawsuit filed by the music industry against Diamond Multimedia Systems, the maker of the Rio MP3 player.

Colouring within the legal lines is not all that Napster is doing. The company is also using technical means to separate itself from its users' conduct. The service is structured so that none of the content -- copyrighted or otherwise -- is stored or cached on the company's servers. "There is no copyrighted music that crosses the Napster network," said Fanning. "We are about building music communities, not stealing."

Such semantics may not impress the music industry defender, known as the Recording Industry Association of America, however. "The RIAA has said that law works," said director of strategic planning for the Electronic Frontier Foundation's Consortium for Audiovisual Free Expression, or CAFE. "And they haven't been shy. They've used a variety of legal methods to enforce copyright."

While the RIAA's offices were off on Friday and its staff not available for comment, Emusic.com's Kohn thinks that Napster could be the testing case for the recently passed copyright law. "A large record company has several thousands artists," he said. "(Under the law,) they can provide a notice and takedown request with all the links that were taken from Napster's search engine." For Napster, that means it would have to block certain song titles from appearing or the offending user from getting on the service.

Still, that remedy has obvious flaws. Users could easily rename their songs to something less obvious and then let a fellow chatter in on the secret. That could slow down any attempts to find illegal links and refocus the music industry's ire, not on Napster, but on the consumer.

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